Getting On the Right (Audience) Track

Since the days of the broadside, publishers have tried to gain a better understanding of the people reading, commenting on, or interacting with their content. The ability to track user behavior over time not only can help Web publishers learn more about their visitors, it can create revenue from otherwise undervalued content. But publishers remain cautious, especially as they become more aware of the headaches behavioral targeting can bring.

Cheerleaders for behavioral marketing techniques say the latest data- tracking and audience-segmenting technologies allow publishers to truly define their audiences. Finally, they say, publishers have the potential to sell all their inventory at a premium. Now that publishers can individually track and serve ads to dieters or celebrity gossip junkies, advertisers won't clamor only for high-demand contextual placements, but for any page their target market visits.

But this audience-slicing sword is double-edged. Sometimes advertisers want to reach more people than single sites can offer. To create higher volume for advertisers, sites can join networks so data can be shared across multiple sites rather than just one. But this could dilute the unique value of each publisher's content, as well as create privacy concerns. In addition, advertisers want more standardization of audience segments to streamline media buys. This, too, could weaken the unique worth of each publisher's audience. Plus, behavioral-targeted ads can wreak havoc on inventory management, compounding an already unpredictable problem.

Despite these arguable pitfalls, publishers like Dow Jones Online can take what it already knows about its audiences and refine audience segments based on page views. The publisher has determined that 99 percent of Wall Street Journal Online (WSJ.com) readers are college-educated, and have household incomes of around $215,000 on average. This site's audience can be divided among pre-defined segments such as "Financial Elite" and "College and MBA Students," or can be broken down according to advertiser objectives.

"Say someone is selling a PDA [personal digital assistant] and is looking for early adopters of technology," describes Mike Henry, vice president of sales and marketing at Dow Jones Online. The site can isolate all the people who visited the Online Journal's Gadgets column during a given period, "and those people get put into the 'Gadget People Basket,'" Henry explains.

"We're usually trying to package our content, not our users," Henry adds. WSJ.com has been using Revenue Science's behavioral targeting software for about two years. At first glance, this seems like nothing more than contextual targeting. The difference, of course, is that with behavioral targeting, the ad can be served anywhere the reader goes on the site. So if a targeted "Gadget Person" visits an area of the site that garners typically low cost-per-thousand (CPM) rates, the publisher can charge more for that inventory than in the past.

"We've been intrigued at the idea of a specific audience that's being sold at a lower CPM that can be monetized better," comments John Kosner, senior vice president of new media at ESPN.com. Despite the obvious appeal of rate hikes, the sports publisher has yet to fully embrace behavioral targeting. "Our take is it's early in the game," Kosner says, adding, "While there is advertiser interest, we've had no problem booking inventory through normal placements."

Jim Spanfeller, president and CEO of Forbes.com, isn't convinced that behavioral targeting is right for the financial site. "Our site tends to be homogeneous. Business decision-makers are our target. [Behavioral targeting] is better for a larger, multifaceted site." Forbes.com has experimented with behavioral targeting using Tacoda Systems' software and its own in-house technology.

The publisher puts its users through a slightly more stringent approval process than some sites offering similar audience categories. In order to become an iVillage "Fitness Guru," for example, a user must have visited the site's Diet and Fitness channel three or more times in 30 days; other sites may require just one or two visits to a similar section.

iVillage developed a set of audience segments based on a hair-coloring quiz for a beauty advertiser. Based on their responses to a quiz that associated hair color with self-expression, users were divided into five segments like "Life of the Party" and "Classic Communicator." Now, no matter what section of iVillage they visit, quiz responders are served ads for the hair-color brand that correlates with their quiz-related segment.

"For some vertical areas, there's only so much traffic certain areas will generate," says Forbes.com's Spanfeller, referring to the small number of people who fit into narrow segments like "left-handed rose growers."